Bank to the Future

Article Featured Image
Deputizing its employees-all of them-in the sales cause was a matter of life or death for Bayshore National Bank, a small financial institution on the outskirts of Houston, Texas. Like many small banks across America, this 50-year-old community bank faced increasingly stiff competition from huge financial service providers that offered every banking option to everybody, everywhere. Bayshore realized that to survive, it needed an edge.

That edge came in the development of a company-wide "sales culture," in which all employees actively market checking accounts, loans and other financial services to existing and potential customers. In this sales culture, employees are given extensive sales training and the customer relationship management (CRM) technology tools they need to translate this training into dollars.

Now, when you walk into any one of Bayshore's 10 branches, each and every employee-from the janitor (who carries business cards) to the CEO-is trained and ready to assist in selling you the financial services you need. They use their newly acquired sales skills in conjunction with a sophisticated CRM system that qualifies and tracks leads, instantaneously captures credit ratings, manages customer files and provides an effective call center, among other functions. With this system, says Tom Houston, the company's executive vice president, Bayshore now has the competitive edge it needs.

"We are in a highly competitive area-Houston is the fourth-largest market in the United states," says Houston. "Being a small bank, we had to look to technologies to level the playing field. We have now upgraded the bank's technology systems to where it is one of the leading technology banks in America. It is absolutely a success."

Bankers' Battles
Bayshore's evolution from traditional bank to high-tech selling organization mirrors a growing trend in American banking, one in which banks aggressively market their products and services. Not too many years ago, the banks where you had checking and savings accounts were mostly local institutions, enjoying de facto monopolies over specific financial fiefdoms. But after two decades of mergers and acquisitions, smaller and even mid-sized banks must now compete against nationwide megabanks that have deep pockets and seemingly inexhaustible resources. This mutation of the financial services landscape, coupled with recent new laws allowing greater diversification of services offered, is rapidly changing the way customers bank-and the way banks view customers.

"When you go into the average community bank in America and you want to use its products and services, you have to go find somebody and convince them to sell you a loan or a credit card," says Houston. "That is changing, and people are realizing the need to sell the services they offer, not passively sit back and wait, but go out and aggressively sell. Banks are now trying to figure out how to do this."

CRM technology plays a key role in this new marketing culture. "Banking is one of the hottest areas we are automating," says John Ferrara, executive vice president of GoldMine Software, the CRM software vendor that automated Bayshore's sales processes. "Banks have traditionally been a place to deposit money, not manage it. That is all changing. They are now using marketing, sales and support technologies necessary to manage the entire customer life cycle. The whole process of marketing, selling and servicing is going through a revolution."

For Bayshore, that revolution began three years ago with the identification of several shortcomings in its sales processes. First of all, the bank was not effectively selling the full range of financial services it offered to existing customers. Second, the bank was not attracting as many new customers as it could. Finally, promising sales leads were abandoned and left to die in a black-hole manual filing system. "We were using folders in file cabinets to create individual files," says Houston. "The problem was that once the files were established, nobody was going back into them to follow up. If you are opening 10 to 20 new accounts a day, it is not physically possible for a new accounts clerk to track these things.

The Road to Sell...
At this point, Bayshore decided to fundamentally change its sales processes to utilize both manpower and technology to their fullest, a plan that would ultimately take three years and $700,000 to accomplish. To create an effective sales culture, Bayshore would train all of its employees with the Omega sales training program, which, according to Houston, is "Sales 101." Then it would give its new sales staff the CRM technology tools it needed to effectively manage the company's relationships with customers. But first, Bayshore execs had to sell the idea to its new sales force, the employees. "We started off at a company-wide meeting," says Houston. "We explained it was a company-wide program and that it was essential that everyone buy into it."

Some bought into it more than others. "When you implement a program like this, you will lose one third of the employees in the bank," says Houston. "Some people loved it and some didn't. Some people just don't want to sell." In the face of such sporadic resistance, the bank gave its employees aptitude tests to determine if some needed support in certain areas and then followed up by providing additional training.

The majority of employees, however, responded well to the Omega program and learned the basics of selling. Houston says that at this point it was important to give these newly trained employees the tools they needed to track their progress. Traditionally, such tracking had been done either manually or on an Excel spreadsheet, systems that were inadequate for the amount of selling the bank anticipated. To provide effective CRM tools for tracking, Bayshore chose GoldMine 3.0 (which has since been upgraded to 4.0) by GoldMine Software. Houston chose this application after running several comparison studies with leading CRM software packages. "We compared GoldMine, Vantive and SalesMaker," he says. "We also did a test with GoldMine versus ACT! with each system using 25,000 records. GoldMine was 30 percent faster." Houston also went to Bank One in Cincinnati to see how it was using GoldMine for credit scoring and other purposes. "I walked away totally amazed with the power and flexibility of the system," says Houston. "After I saw that, I was sold."

Come Together
At Bayshore, the CRM system, which operates on a Windows 95 system, acts as a data mine fed by other banking applications, all of which operate on an IBM AS/400 server. Customer information from any number of sources is fed into this system, where it is processed into lead management information. For instance, Bayshore uses the Silverlake customer accounting system from banking software vendor Jack Henry & Associates to manage all information on loans, checking accounts and so on. Silverlake interfaces with the CRM software, where basic account data becomes sales contact information.

The bank also operates a customized application, called a Marketing Customer Information File (MCIF), that analyzes customers' accounts to determine which ones are profitable and have further sales potential. MCIF also interfaces with the CRM system, which processes the information into lead management, so that when a bank employee contacts an existing customer, the employee can recommend the financial services appropriate for the customer's needs. This type of account scoring is becoming the cornerstone of financial services marketing and will soon feed both face-to-face, telemarketing and ATM-based financial service marketing programs (see "Banking Bonanza?" this issue).

Other types of bank data feed into the CRM system as well. According to Larry Hurwitz, CEO of Imimage Software, which implemented Bayshore's CRM application, the bank uses a device known as a Lucent switch to dial out and retrieve credit information on a particular individual from Fair, Isaac, a company that provides credit-scoring services to the banking industry. Credit information is quickly downloaded into GoldMine and appears as part of the customer's profile. "With the Lucent switch, I can make sure your credit is clean while I'm talking with you," says Hurwitz.

The CRM software implementation, which commenced in the summer of 1998, went smoothly, but was not without a few hurdles. "I wouldn't call it challenging in the sense that it was problematic," says Hurwitz. "It was challenging in that we were working with other applications, like the Lucent switch. GoldMine could have fulfilled the basic needs out of the box, but the bank wanted other stuff as well."

That other stuff included syncing Bayshore's multiple branch offices, each with its own database, into the system. "If we could have done anything differently, we would have started out with a true client/server system," says Houston. "We are now syncing nine different databases. Eventually we will move over to that type of system."

To train its employees in the use of the CRM technology, Bayshore set up a computer lab with 15 stations. It also developed workbooks and hired a project manager-Johniece Randolph-to oversee employee training. The course was divided into three levels: basic and intermediate for employees and advanced for IT staff. As the rollout commenced in each branch, employees attended two, sometimes three, classes per week. Everyone received training except the tellers (the bank wisely realized that customers don't want to hear a sales pitch every time they cash checks). Overall, says Houston, employee CRM training went relatively well. "Windows 95 was pretty intimidating for them, but once they got past that, GoldMine is pretty straightforward."

Competitive Edge
The new CRM system facilitates Bayshore's sales culture by giving employees the lead-management tools they need to effectively manage the sales process. Gone are the black-hole file folders that consume promising customer contacts. In their place is a system that, says Houston, accomplishes the following: Provides one accessible, central place to forecast sales for every customer and potential customer the bank is calling on. Before Bayshore implemented this system, "two people calling the same lead was a big problem."

Offers a call center function to address customer problems. Prior to the implementation, the bank relied on an inefficient system of phone tags and notes. The new system immediately assigns a manager to deal with customer complaints.

Provides one place to update customer files. <

The newly found manageability of contact information has led to innovative lead procurement programs designed to lure customers banking with other banks to Bayshore. "We print images of the checks from other banks that come through our bank," explains Houston. "The information from these checks goes into GoldMine and our people call these people and invite them to bank with us."

According to Houston, perhaps the most significant benefit of Bayshore's contact management system is the up-to-the-moment analysis of sales data it provides. With their new sales skills, bank employees have incentives and sales goals to motivate them. The system offers current information to help each employee gauge his or her performance. "It gives you a real-time forecast of where people stand," he says. "Before, we updated forecast numbers once a month. Now, we forecast daily after each call. The quality of the data is much better."

Houston says that sales process overhauls take "time, money and commitment." Furthermore, because of recent bank acquisitions, he cannot numerically gauge the success of Bayshore's new sales culture. But he does offer one of the bank's employees as an example of how sales training and CRM technology have cast Bayshore as David to Bank of America's Goliath. "We have one employee working in the Treasury Management department. She started out with one client, and now she is going out every day and bringing in new customers. Without this new system she would not be as successful as she is. It has organized her beyond belief."

At A Glance

Company: Bayshore National Bank

Location: La Porte, Texas

Branches: 10

Employees: 140

Assets: $300 million

Point of Pain: Products and services were not being effectively marketed. Also, follow-up on promising sales leads rarely occurred.

Solution: Trained all 140 employees to sell. Implemented GoldMine 4.0 CRM solution to manage new sales processes.

CRM Covers
for qualified subscribers
Subscribe Now Current Issue Past Issues
Buyer's Guide Companies Mentioned